Use the information below to answer the following question(s).
Towpath Tennis & Recreation's operating activities for the year are listed below:

-Which of the following, in addition to cost of goods manufactured, is needed to compute the cost of goods sold for a manufacturer?
A) Beginning work in process inventory less ending work in process inventory
B) Ending work in process inventory less beginning work in process inventory
C) Beginning finished goods less ending finished goods
D) Ending finished goods less beginning finished goods

Question

Use the information below to answer the following question(s).
Towpath Tennis & Recreation's operating activities for the year are listed below:
 
-Which of the following, in addition to cost of goods manufactured, is needed to compute the cost of goods sold for a manufacturer?
A) Beginning work in process inventory less ending work in process inventory 
B) Ending work in process inventory less beginning work in process inventory 
C) Beginning finished goods less ending finished goods 
D) Ending finished goods less beginning finished goods

Quizplus · Accepted Answer

To compute the cost of goods sold for a manufacturer, we need to know the cost of goods manufactured during the period (i.e., the cost of all products that were completed during the period). However, not all of these products may have been sold yet. We also need to know the change in the manufacturer's finished goods inventory during the period (i.e., the amount of finished goods that were sold). Therefore, we need to calculate the beginning finished goods inventory at the start of the period and subtract the ending finished goods inventory at the end of the period to find out how many units were sold. Finally, we can multiply this by the unit cost of goods manufactured to get the cost of goods sold.

Use the Information Below to Answer the Following Question(s)